[opendoor]

Originally Posted by Slava

I don't get this line of thought. Of course there are actuaries. But, there were actuaries in cities like Detroit where they had enormous issues surrounding their pensions. It's not just super simple to make sure that these things are properly funded, but that isn't even the main concern. It's that you calculate what is required for proper funding and it's a pile of money...as evidenced in your next sentences!

Sure, but Detroit was a city that was extremely poorly run and which had had its population decline by almost 70% over the decades. If there are cities in Canada in similarly precarious positions with massive unfunded liabilities, then fair enough. But their problem went far beyond pensions; half the property owners in the city weren't paying their property taxes and the city couldn't even pay their bonds.

Quick question on that teachers pension though. That 25% that is contributed...are the employees themselves putting in 25% or is that made up of their contributions and the match from their employers?

I'm only familiar with BC's, but it's a combination of employee contribution, employer contribution, and then CPP, which forms part of the pension benefit. So it's something like ~11.5% from the employer for the pension plan, ~11.5% from the employee, and then for a teacher's salary, probably about 6-8% more in CPP, with half contributed by each party. So that's the equivalent of ~30% of their gross salary going into pension funding (15% deducted from their pay and 15% contributed by the employer).

Now you could exclude CPP from the calculations to do a better comparison to non-pension workers, but then you have to exclude the benefit. Because when you hear about teachers making say $50K a year off their teachers' pension, the first $10K or so is from CPP (at least that's the case in BC). My mom is a retired BC teacher and she only gets about $25-30K from her teachers pension after a 35 year career. Along with her CPP and OAS it's a fairly comfortable retirement, but the teacher portion isn't some unachievable sum if you're putting away 11-12% of your gross salary every year and have even modest employer RRSP matching. And that's by design; the level of pension contributions is such that on average, they'll fully fund a teacher's retirement benefits.